Background to the MAI (archived)

Excerpts ...

• The MAI is designed to combine for the first time in an international agreement multilateral disciplines on the three principles of investment rule-making: investment protection; investment liberalisation; and dispute settlement. Its objective is to provide a "level playing field" for international investors, with uniform rules on both market access and legal security. It aims at eliminating barriers and distortions to investment flows, promoting a more efficient allocation of economic resources, and thereby achieving higher economic growth, more jobs and increased living standards.

• In May 1995, the OECD Council, at Ministerial level, committed the Organisation to the immediate start of negotiations in the OECD aimed at reaching a Multilateral Agreement on Investment (MAI), which would:
  • "provide a broad multilateral framework for international investment with high standards for the liberalisation of investment regimes and investment protection and with effective dispute settlement procedures;
  • be a free-standing international treaty open to all OECD Members and the European Communities, and to accession by non-OECD Member countries, which will be consulted as the negotiations progress."

• The OECD Ministerial Council's decision was based on a report by the OECD's CIME and CMIT Committees (Committe on International Investment & Multinational Enterprises (CIME) & Committee on Capital Movements & Invisible Transactions (CMIT). Negotiations on the MAI take place in a Negotiating Group, chaired by Mr. Frans A. Engering from the Netherlands. The vice-chairmen are Mr. Alan Larson (United States) and Mr. Kenichi Suganuma (Japan)

• The decision in 1995 of OECD Ministers to launch the MAI negotiation was also a logical step to consolidate and complete the existing OECD instruments -- in particular, the 1961 Codes of Liberalisation and the Declaration and Decisions on International Investment and Multinational Enterprises- which have helped promote international investment and economic co-operation for many years.

• In addition ... the MAI is being developed at the OECD because the OECD countries collectively account for a large part of foreign direct investment flows world-wide: some 85% of outflows and 60% of inflows. Accordingly, these countries have a major stake in the rules that govern international investment.